So much for the clever country, we're squibbing it

Bob Hawke wanted Australia to be “the clever country”. Malcolm Turnbull's variation on the theme was for Australia to be the “innovation nation”.

In his first, brief remarks after wresting the prime ministership from Tony Abbott, Turnbull memorably told us “there has never been a more exciting time to be an Australian”.

“The pace of change, which is being ampified by the internet, is extraordinary.” The big dividing line in Australian politics, he said, was not Labor versus Liberal but between those who were “afeared” of the future, and those who embraced it.

Australia needed to become “agile, innovative and creative”, he said, and commissioned an eminent Australian, the father of Australia's venture capital industry, Bill Ferris, to lead the intellectual effort to create it.

But the excitement proved too much for most of the country. And Turnbull's constant talk of disruption made much of the electorate afeared of the government. When he came within a few thousand votes of losing the 2016 election, he became afeared himself.

"The word 'innovation' didn't seem to work for the politicians," observes Bill Ferris, who just this month finished his three-year term as chair of the federal advisory agency that Turnbull created, Innovation and Science Australia.

"Prime Minister Turnbull retreated visibly from the innovation imperative," Ferris tells me. Innovation went from peak vogue to dirty word. Perhaps the greatest government failure was the effort to reform the tax concession for companies that invest in research and development, or R&D.It's a failure that played out in a Senate inquiry this week and will continue in the months ahead. It's a failure that Turnbull as prime minister and Scott Morrison as treasurer agreed to in this year's budget. They can share the ownership.

The reform began with good intentions. The government in its excited phase asked Ferris to consider how to improve the R&D tax concession. It's a three-decades old scheme designed to encourage companies to invest in innovation; it costs the taxpayer about $3 billion a year in revenue........